2015 New Year Speech

In the passing 2014 SBC has accomplished a lot, and among these achievements there is a unique one that should not be forgotten: when the industry was in panic and fear, SBC was still alive and well.

On the other hand, in the coming 2015 the greatest storm is yet to come, and because of that it is meaningless to dwell on the past year’s achievements.

2015 will be a year of crisis in the industry, and I believe it will also become a turning point for SBC. After more than 20 years of development, there exists a strange phenomenon in the LED display industry: until now there is still no instantly recognizable brand on the market. This is also a blessing for SBC, otherwise we would have lost our position in the industry.

Today is the New Year’s Day of 2015. I would like to make a simple analysis of the LED display industry and of SBC, so that we can strengthen our faith, commit to our goals even more, and not lose direction, morale and courage in the following, fiercer and more chaotic, market competition.

1. The industry’s situation can be summarized in one simple word: mess. Before 2014 this mess was just an outcome of a brutal and dirty competition, but since 2014 it has also been the result of a great storm raised by capital. The above is not surprising, because such a situation is the result of the profit-seeking nature of capital. This dirty competition period will continue until there are only two or three brands left on the market. This will take between 3 and 5 years. SBC will be the final winner. I don’t know who the other two companies will be, although we might speak further of it afterward.

2. In 2015 the industry’s mergers and acquisitions trend will be on the rise. Between 2013 and 2015, public companies and capital market will have channeled nearly 10 billion RMB into the industry. When public companies decide to raise further capital through the stock market, they will be unable to meet the business growth requirements of the Securities Act while developing on their own. That’s why in order to generate “virtual” rapid growth, they can only engage in legal mergers and acquisitions. That way they can develop on a larger scale and at the same time keep their refinancing qualifications.

3. A lot of LED display companies will close down. In order to qualify for refinancing, public companies will use all possible financial means to deal with their competitors. They will sale their products for lowered prices or for less than the production cost, without down payment or allow payment by installments; in case of large projects they might just require to sign the contract, and they will immediately deliver the products, and other similar means to attract clients. They will also manufacture to stock, thus reducing the cost, controlling the suppliers and beating competitors at the same time. Because of these means of competition, companies without a known brand, quality products, capital, technology, talent or management advantages will have no other choice but to go on sale or declare bankruptcy.

4. By October 2015 the period of mergers and acquisitions in the industry will be be over, and the competition between capital and brand will start. That is to say, large public companies will compete for the market share and refinancing qualifications. This period will last for a relatively long time, only in December 2017 will its outcome become known. By then, public companies will face special treatment or delisting. However, companies like SBC will then reenter the capital market and remain on top forever.

During this period of bankruptcies and mergers, SBC will not go for sale, let alone go bankrupt! On the contrary, SBC has been looking forward to this day for the last 10 years! Of course, we do know that the industry will be threatened by a growing crisis during the period from January to October 2015, and that SBC will face as many difficulties and challenges as any other company, whether public or not. We have to understand that public companies are not so powerful, mainly because their management and staff are unable to keep pace with the company’s financial expansion. The faster the company’s financial expansion, the bigger the pressure on the management. In this period, no public company will have an absolute advantage over others, regardless of how many companies it managed to buy or how large it became as a result.

SBC has excellent organization, staff, management, culture, and, most importantly, excellent creativity and strategy. But how to turn all these excellent qualities into excellent execution, financing and brand, is the greatest aim and fundamental task for all our SBC staff in the following 10 months to 3 years.

The period between January and October in 2015 will be an important shuffle period for the industry, and it will also be a unique opportunity for SBC. We have to treat every day as the day of the decisive battle, move from victory to victory, turn time into space. We must seize this important historical opportunity, we must strive for every day’s success, successfully compete for every customer.

In the past, SBC obtained the ISO9001:2008 TUV quality management system certification in just 15 days (until now, SBC is the only company in the display industry to have obtained this certificate), which makes clear that there is no need to doubt SBC’s quality management methods. During further implementation of the ISO quality management system our products will become better and better, which in turn lays a solid foundation for us to further expand into both home and foreign markets.

In the past two months SBC has done a powerful internal reorganization and some of the staff left the company as a result. Nevertheless, it was a necessary step to take in order to prepare for the coming industry crisis, both in terms of staff and also spiritually. At present, SBC’s staff is in high spirits, confident, down-to-earth, ready to compete and has strong execution ability. 2015 is indeed a year of crisis for the industry, but it is also a year of opportunity for SBC.

We should never miss the opportunity that comes with a serious crisis. However, we need to be fully prepared. Since no one is able to force the opportunity to come, we just need to believe in this maxim:

“Luck is what happens when preparation meets opportunity”.

SBC has been preparing for almost ten years, and now that the opportunity is at hand, luck must also be on its way to SBC! That’s why we must be down-to-earth, prepare carefully, try our best, advance bravely, and win the final battle. And that’s why luck cannot run away. It simply has nowhere to go, except SBC. (By Mr. Bill on the New Year’s Day in 2015).